Pubs in recovery 'but more closures likely'

THE embittered and embattled pub trade is over the worst, but further closures and insolvencies remain likely.

That's the view of industry experts at accountancy firm PricewaterhouseCoopers, who say pubs are exposed to government spending cuts, rises in interest rates, and falls in consumer spending.

Pub insolvencies seem to have peaked in the last quarter of 2009 when 88 pub firms failed. In the second half of this year that failure rate dropped by a third, but was still at a historically high level.

Those 2010 collapses included London-based firms such as London Town, Capital City Brewing Company and Globe Pub Management. David Chubb, a partner PwC said: "Pub company insolvency rates have fallen from where we were a year ago - but trading remains difficult and further failures are expected as lenders consolidate their positions.

"The insolvency stats do not fully illustrate the extent of the problems in the sector."

Despite talks of public sector cuts and an uncertain unemployment market, 22 per cent of consumers polled anticipate having more disposable income over the next 12 months, up from 17 per cent a year ago. Economists are currently speculating that interest rates could be raised to 1.5% or even 2.5% by the end of the year.